The Art of Building a Real Estate Boutique

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week special guest Janelle etel who majored in weaving tells Sean busy who majored in Ceramics why she believes attending art school and managing a punk rock band were perfect preparation for building a thriving real estate business her agency living room realy has 130 Brokers roughly $5 million in revenue and a market position that stands Out Among the big boys while she once considered business a dirty word she has embraced entrepreneurship and learned lots of important lessons mostly through trial and error for one she figured out that there was a segment of the housing market or the potential housing market that most traditional Brokers were ignoring she also figured out somewhat counterintuitively that her real customers aren't the people who buy and sell homes her real customers she says are her brokers who happen to be independent contractors I can't tell anybody what to do Janelle tells us so it's like being a politician in a way I've got a lot of responsibility with very little authority and that's an interesting leadership challenge even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by a principal sponsor of the great game of business will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Jak magazine named the best newsletter for business owners and which you can subscribe to for free at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are Janelle etel who has her own podcast Joy Punk podcast and who is founder and CEO of living room realy in Portland Oregon and Sean busy CEO of Kinesis which also is based in Portland and works with small businesses on marketing culture and strategy the episode is titled the art of building a real estate Boutique welcome Sean and our special guest Janelle etel it's great to have you here Janelle there's a lot going on in the real estate industry right now and we want to get to some of that but first can you tell us uh a little bit about uh your own journey and how you came to start a firm yeah well thank you Lauren thanks Sean for having me on the hats podcast it's a pleasure to be here I own a Company Portland Oregon we're also in Vancouver and on Oregon's North Coast as well and it's a real estate brokerage named living room realy and we have another company as well which is living room property management and under that is a maintenance company um that we call the fixers so it's say three companies under one parent brand brand it's interesting now to be like a Serial entrepreneur because when I got into real estate uh being a business person was the last thing on my mind um I have a degree in weaving an artist and I was playing in a girl's punk band called spread eagle so um literally a year before I got my real estate license I was living in a van with uh with my band so the the reason I got into real St was that as an artist as a musician I was really concerned about what I was going to do for long-term Financial stability and um I had knew a fellow female musician her name was Jen Augusta and she invited me over to her house um I was working doing some part-time tile setting at the time and so she was had a tile project she said come over check out what I'm doing you know have a beer and I'm sitting on her kitchen a floor with her and we're we're putting down some tile and she told me that she had bought the house and I was like you bought this like how does someone like you like buy a house you know we're both in our early 20s and she said yeah you know the coolest thing is is I'm running out all the bedrooms and living for free in the basement so that I'm able to tour with my band and I just immediately like light bulb went off and I'm like I've got to be able to do that um I saw you know one I'm a real long-term thinker like when I had to write an essay in third grade on what I wanted to be when I grew up it was retired and uh I got in a little trouble for that I say but uh I'm a long-term thinker but also like like someone that was like trying to you know trying to really add to scrap together my day-to-day existence you know as an artist and musician I was just thinking wow that would take the pressure off and that would give me more room to to create and then in 30 years it'll be paid off you know and at least I can control that bit of my financial wellbeing my financial picture so she kind of gave me the rundown of how you do it and at the same time I had another girlfriend who was able to buy a property as well and she'd Ed the Oregon State Bond loan and I was like what do you need to do and they were like okay you got to find a job that pays you $14 an hour and at the time and in 1999 2000 that was not easy I was like okay 14 bucks an hour gosh um and you need to save up $14,000 for a day on payment you know probably between 10 and $14,000 and so I just saved everything that I could told my grandpa what I was doing and he was like Hey kid if you can save seven I I'm I'm in for the other seven which was just a a huge huge blessing so I bought a house and totally life-changing for me and and I was still playing in the band at that time and so we'd go to a show and then I would hop off the stage and go to the bar and usually I'd be talking to the drummers you know they always get evicted because they make too much noise and I was like I've got the solution you just got to buy a house and like this is how you do it and I was referring so much business to my stepmom who'd had a real estate license that she's like you know you might think about becoming a realtor like and helping all these people that you keep sending me from the bars and so that's kind of how I fell into fell into real estate and then you know working at uh I worked at the Hassen company one of the leading brokerages here in in Portland I learned a tremendous amount um but I also eventually got a little a little frustrated that nobody seemed to be talking to the community of people that I knew so well like in real estate what I was seeing is that we would show you know this like straight white family with a picket fence and two kids and I'm like I have not even seen these people in Portland ever I don't know who we're marketing to who we're telling a story to and and that frustration finally kind of started to grow into what I realized like oh hang on there is an empty stage for me to get up and really tell the story of how people like myself are changing their lives through real estate and this was coming on in Portland at about the same time I had a lot of clients who worked at suntown coffee that was kind of changing the way that we were thinking about business like it was a local Portland brand I felt like they knew who Their audience was they were really um talking to them they were independent and so I saw like wow you could maybe you can do business in a way that is an alignment with who you are and I think that before this period you know I grew up in a world that business was kind of a dirty word it wasn't for Creative people or it wasn't for people like me and so I think seeing what Stumptown was doing seeing what some of these other local brands at the time were doing I was like wait we could do that with real estate and so the vision of of living room was was born and oftentimes people ask me you know how why what is the name all about you know why living room and um and that really came from because most of my clients were musicians artists is that we'd always check out the living room last like when I was with a with a client we'd go to the garage and see if there you know if there was good workspace or we'd go to the basement to see if you could load in andout gear easily or we'd go upstairs and see if the light was good for painting and then because those were the spaces that my clients were making a living in like this is where they lived and then the living room was kind of the last room and what they were looking for is like space to thrive space to for their creative Endeavor so I was thinking about the concept of living room in this really different way not not as in a is in the actual room in a house but as a concept of of of how we live and real estate giving us the ability to express that lifestyle in an in a in a way that's really creative and really exciting to me it's cool you know Janelle there's a pretty common Trope of when houses are selling and the Market's hot lots of people want to be real estate agents they flood into the business and then things inevitably change and a tremendous number of them wash out given your background it sounds like that could have been you why wasn't it why did you stick with it um well I wasn't attracted to it because the market was hot like I didn't know I didn't even know about markets I didn't know what I didn't know it it could have been the worst time to get into real estate I mean in fact when I started Living Room it was in the depth of the housing recession you know it just it wasn't really about the timing of the market it was about the timing of what was right for me you started a real estate business what 2008 2009 yep not only that I started a real estate business in in 2008 and I started it with a 17-month-old baby and another one on the way in a month and a half like and from the outside the timing couldn't have been worse and from the inside the timing couldn't have been better and so I think that that's the same counsel I give to folks who are like is now the right time to buy it's like I don't know like I don't have a crystal ball we just don't know but is it the right time for you or or is at the right time in your life and so I think it's interesting now to have a established company and navigate another major downturn with something that's already built I have a lot of new respect I I was a little cocky coming into this down Market because I'm like this is the stuff I'm born of you know I started in the down turn this is where I'm great this is where I've like you know been able to accelerate out and um but it's a much different thing to to start something up when conditions are hard than to maintain something that's large and built and that you know I've got 130 Brokers I'm leading them through whatever fears anxieties that they have and that's a really different leadership challenge than that entrepreneurial on your own risk of like well this is the timing for me like I feel confident it's like okay well how do you get1 30 people that feel confident it's it's really different tell us about that transition Janelle what was it like when you went from being uh a broker in somebody else's business to starting your own um boy is it humbling it's really really humbling I think the first thing that comes to my mind is how there were so many things I was frustrated with at my old company like it felt like we were in a cruise ship and I needed to do a 180 in the river right and so I'm like forget it I'm going to get out into my own speedboat like this is exhausting trying to get all everybody to come around and so when I was actually running my own company and I saw the expenses I saw the risks I mean I was the prodical son coming home I called Mye cassen my former um the former owner and and later would become a really close friend and mentor and was just you know very humbled and I said to him I I hope that you know any bit of success that I'm having is a direct correlation to all the opportunities and all the gifts that you've given me and all the lessons I got to see while I was there and I had no idea I had no idea like what you were um what kind of decisions you had to make and the weight you probably went home with alone until someone's been in those shoes you just have no idea and to think like you know I remember asking him you know if like we should join this environmental Building Group you know just thinking that I'd had the best and brightest idea of the year and he's like oh let me think about it and being really frustrated but like I think we should do this and I'm like God how many agents did he have wanting to join whatever small interest group they had you know and like how do you measure big decisions like that with with you know he had 250 Brokers I think at the time and the thing that leadership has taught me too is that you know all the skills that got you to a place you know and all the strengths they'll get you to a certain to a certain level on the mountain but you've got to be willing to take a hard look at yourself and be like okay the things that got me here are not going to get me here so am I the right person to keep climbing and where can I get those skills and so leadership's giving me this incredible opportunity of self-growth that I don't imagine I would have gotten anywh else like I've had to work so hard on myself and my own limitations and um you know my strengths my weaknesses communication um I've had to really learn the lesson of listening to people's commitment when they come up to me and they're hot like for example I had an agent come and she's pissed off about our website and like I don't I mean my first reaction as a human is just to be a bit you know like what is your deal why you coming at me so hot that you know in the kitchen catching me off guard but then underneath taking a minute and listening to her commitment that like oh she's just so passionate right now because she wants us to have the best website in the industry and she sees an issue and I'm the person with the power probably to change that so she's coming to me and then you know so getting on the same page as people listening to them as bigger people seeing the best in people being able to lead them through towards Solutions like all of this stuff it was not second nature to me initially and I've have to work really hard at it every day and I've had to work really hard on on becoming a better person a better leader Sean you made that same transition from being an artist to being an entrepreneur and a business owner anything anything you can relate to in there Janell I I had never known your full story and it's so it's just so fun to hear because I also had that revelation of like gosh I've got to make some money you know I can't just be an artist I also moved to Portland I moved here in ' 05 and I also rented a room like that was my my real estate strategy was renting a room out in the house that I had bought oh and then the other one too is uh I started my my business in the recession of 2000 and when' 08 rolled around I told myself this story like well I started my business in a recession certainly I can navigate through another one it won't be that hard yeah what a freaking I was really kidding myself they're all hard they're all hard yeah they're all hard and yeah your business is a different place it's like you know it's just like oh I had a I had an infant in a recession okay well now I got an 8-year-old in recession you know or now I got a teenager you know it's just different it's just every challenge is different there's so many similarities too you know and how in early on the stakes the stakes feel much lower in some way and like how you can just gut through it like oh I can work 18 hour days no big deal you know and like you can't do that in your midlife and and not to mention that the pressure you must feel of all those folks who are counting on you like you too I also I didn't know Finance forever you know I didn't know so much stuff about business but I do think the superpower we have right is we're both creative so we're like well we'll figure it out you know I'm not not scared of that right I'm kind of curious like you know as you've built this business I mean 100 plus people that is a lot of communication you know I think as artists are actually good communicators you know kind of weird unpredictable way but I'm kind of curious how you manage that how do you manage you know keeping the lines of communication open so people feel heard but also like you're not overwhelmed by making everybody feel her how do you balance that out oh that's a good one J before you answer that yeah yeah thanks could you just tell us are those 100 plus people are they employees or are they contractors what's the relationship yeah so um with residential real estate brokers that are at our company those um they're all independent contractors um and it is like the brokerage's job to ensure that you know they're following kind of the of the law and that they are kind of understanding our brand culture so there's definitely a lot of communication there but I can't tell anybody what to do so it's like being a politician in a way I've got very I've got a lot of responsibility with very little authority and that's an interesting leadership challenge and I think uh if anything it's going to make me a really great candidate for governor one day or or something like that I don't know where do you take that but uh and then I have um employees I've got an employee team and we're at about 26 people and our agents have their teammates too so they've got you know kind of small business Brands under underneath them so we've got some folks with teams is you know as big as seven or eight people so so back to Sean's question Sor to interrupt do you want him to repeat it no yeah so yeah how how do we create how do we make sure that people feel heard you know it's really important to me in that I think that I'm someone that I want to understand the purpose of anything I just don't do anything because someone told me to right I mean that's like a little bit punk rock uh and and it's like what what are the rules okay well let's throw those away and I if the rules don't make sense I'm not going to I'm not operating by those although I'm a person does love to create structure and follow rules every good bit of thing that I do came from me just it up royally to be honest like I just totally screwed it up and then I was like oh okay let how do I build a little system so I don't do that again and one of the things that I used to do is that um you know I talked to the press a lot my role at the at at work is talking to press doing a lot of our marketing and so I let a writer for the paper know that we were opening up in Vancouver before I let my agents know and I didn't realize like how hurt that so many people would be that they're finding out in the paper about something that's coming that's you know like kind of really affects them and and their brand and it's like sometimes I'm just like am I really that dense but I am really that dense often so that made me realize well gez I should start a council maybe I could have a a Leadership Council of agents and before I tell anybody anything I will tell them and get their feedback and make sure they know and then make sure that they can help me articulate that out into our agent body and so I actually came up with a communication protocol that's really helped me a lot and one of the things that really drives my staff crazy is that they work at the desk and they know that when the owner of the company says something they better pay attention and read it well agents are independent so maybe they read it maybe they don't and you know and so this staff just never understands like I emailed them that and I'm like oh that's cute that you think that anybody read the emails nobody read it you're basically working with 130 entrepreneurs oh yeah I mean it's just like are you kidding me unless you light it on fire in front of their house and then you know like right across their forehead like they didn't get it so I just I'm like email it to him you know we got probably seven times then text it to him a couple times then make a rock poster and put it above you know in the bathroom and over the copy machine you know like if it's important we better be saying it again and again and again and you know to get a staff that you know has always worked in this structured employment atmosphere to understand these agents it's like just because you build systems and they work and they should function does not mean that they're successful unless you can get an agent to actually do it so you have to stop creating things that you think work and stop complaining about creating systems that the agents won't use because if they don't use it then we didn't create the right system so we have to be really creative all the time about how we get in front of which is basically our customer base is our agents that's who we're supporting and that's how we you know that's how we make Revenue do you really see your agents as your customers versus the folks doing the transactions I do I well you know it's interesting from a from both a operation standpoint and a marketing standpoint is that the whole world sees living room and that my customer is the buyer and seller of homes and so I have to behave as if that is true in many ways but then internally the way I actually make money is through collecting the membership fees of agents and so they are my actual customers but my my customers the agents what they want from me is really great communication and marketing and attraction of their customers so they're paying me to attract their customer and they're also paying me to support their business in a different Myriad of ways and so you know who's who and when people come to work for me as staff they think just like the rest of the public like oh home buyers and sellers are our clients like why are these why are these agents so demanding like why don't they act like they're like employees too and it's like oh no no no no when we Orient new um staff to support our agents I'm like what we are is just like a really liberal Country Club and our our agents are those members and some of them play all the time and say some of them play less frequent and some but we need to remember their drinks and their family and like you know how they want to play the course and they also they don't work 9 to5 they may have been up working since 6:00 a.m. and then bailing water out of someone's basement last night at 11:00 p.m. so when you tell them you know that like oh I'm off at 4 so I can't get that to you like it doesn't compute for them because they lay everything on the line servicewise and so we have to be really um mindful that when they come in we are the person that's bailing the water out for them that they feel really supported and that they've got somewhere they can come where they feel like we're laying it out on the line for them too Janelle your business is a network model um meaning there's two networks the networks of people buying homes and selling homes and then the other network is the network of Brokers that you have you know and the larger the scale the more effective you can be to both of those groups yes it's true you know what is hard for me is that at the end of the day we're a small business right like I'm we have you know 25 staff members and we're servicing uh close to 400 landlords and then tenants and then we do maintenance work and then on the broker side we supporting you know 130 Brokers and so it's a small business with a gross with revenues between those two businesses of about five million but on a given year we might sell upwards of a billion dollars with a real estate so in the public eye we look like I mean our signs are everywhere we look like this huge business and so sometimes there's a pressure and we' I've had to learn to navigate the just the tremendous asks that we under you know like can you give to this school and can you give to this and you can give to this and we you know we've had to like come up with a lot of strategies just to navigate like our size we're swinging way way way above our our weight class out in the public Arena and the public eye and how we present ourselves and we have to do this with this tiny little staff that where the expectations on a business of that size would be completely different so it's it's a it's a really interesting challenge are you the largest at this point in the Metro um I believe that we're the largest independent brokerage now at this point we've seen a lot of our competitors go away after this last sales cycle which is It's just sad to me and I'm really committed to trying to help other independent brokerages the best that that I can I just gathered with um five different companies last week to you know see how how can we support each other because I I'm really I really really think that real estate is a business where we all benefit when it's locally owned like you really should know the communities that you're you're serving we've historically for many years had the number one market share in the city of Portland but the second per the person with number two market share underneath us has more than double the agents so we have a few agents but they're highly productive very per professional or a full service um real estate brokerage and um and in that way makes us uh pretty unque as well do you compete for Brokers the way another company might compete for employees one of the biggest challenges currently right now is that we have a model that only works for agents who sell 10 or more homes per year yes they have to sell at least 10 homes or more well the average agent uh sells I think is something around like two and a half or three and because inventory has gone so far down because of the higher interest rates we saw the number of agents who sell 10 or more homes decrease by 30% and that's pretty it's been pretty parallel to what we've seen in our own numbers it's been challenging because you know before I could bring on a new agent and they could easily I could easily get them up and going with just the Abundant opportunity that was just like flying off my other agents you know they just there was just so much business happening that they could um pick up a lot of business that way and when things contract it's just gotten harder and harder and so it's interesting we don't have a lot of agents that leave to go to other brokerages they may leave to go to other careers or they may like Join one of our uh top agents teams but we have seen uh our agent count um drop this last two years post pandemic you said that under your model an agent to be successful has to sell more than 10 homes a year and I'm wondering how your model differs from others well um it's a great question most all models in our Market um you pay what's called a desk fee we have a membership fee so an agent to kind of wear the brand represent the brand and get all the benefits of the brand that that's associated with in our administrative Services um they pay us pretty close to uh $20,000 and then some kind of auxiliary fees on top of that and that's pretty comparable to other full service real estate companies but there are plenty of digital agencies and other things and the fee is much lower for agents so we are you know we're definitely different than than that but most agents find that it's I mean it's like I'll use a metaphor another real estate metaphor it's like commercial real estate it's like okay you can go rent cheaper space somewhere but you don't get the benefit of the traffic and the clean streets and like the the really great you know resources that you would with with a company uh of ours I mean just even I mean go back to that Country Club metaphor just to be around other players who are at the top of their game to me is the single reason that I would join living room realy compared to others it's like I want to be around top producers with the agents that we that we attract are also very values oriented we're a be Corp and it's not just production that they're after they're after balanced lives um they're leaders who find Joy through service and so people find when they come to the living room they get community and culture and the value of being around other people that do business in a way that feels like an alignment with them usually really um I've seen so many people come to us and they've been at a ceiling of 7 or $8 million of production and take that to 30 35 because they're around other people where they can emulate like best practices or like God I didn't think I'd ever build a business that big because I'd never see my kids but you've shown me you know tools and resources and team structure that's allowed me to do that in a way that I didn't think was possible somewhere else can you tell us a little bit about how you're perceived in the market well you know certainly there are companies that I would say are bigger than us you know they got more agents and they're bigger but we're really known for our quality of Agents um we're really known as the company that people go to they're like these people really care about you they're really Community oriented um they give back we are known for being highly collaborative the thing that we hear more than anything is just like you know if we hear this from other agents is is I saw this was listed with a living room agent or I saw the offer came from a buyer represented by a living room agent and I knew it was going to be a great transaction you know that like that we're going to be collaboratively problem solving that we're going to get to close and so I'm really proud of that we've got really good negotiators that understand it's not a win lose game it's about you know having a buyer and a seller both get their needs met and feel really good about the transaction and from the public um what I hear all the time is that you guys have the most beautiful houses we've heard this before which kind of blew my mind was um how do you get all your sellers to paint the front door red and I was like excuse me and they're like yeah every single one of your front doors is red I was like it definitely is not I can tell you that we do not paint everyone's door red but um we just have a consistency our brand color is red and I think what they're what maybe subconsciously they're seeing is that the consistency of our branding and our marketing is always at the top level and just the consistency of that starts to really um land for people that like we painted the front door red yeah you know it's interesting because when Lauren asked that question about you know what do you specialize in or how do you how are you known and the first thought that came to my mind was she's everywhere yeah like like and and I think that may or may not be true but it's my perception and what I mean by that is that you know you have a very unique style in the type of um signs you have and the types of ways you promote your agents um maybe you can tell people a little bit about your thinking behind that sure we are I I think it's consistency it's like I think a lot of people in real estate particularly there are like Keller Williams is a much bigger company than us but they allow their agents to sub brand and so you might see there's no quality control there's no consistency so you could be driving by and be like what's that company or what is that and with living room we feel like okay we're a small boutique agency we need to have a very aligned brand presence so that it actually makes an impact which is hard for individual agents actually to kind of wrap their minds around because they're like well maybe my sign should be unique because that's going to give me an edge and it's like oh boy that's not how marketing and branding works like the feral cats yeah it's like it's it's just not how it works it's so much energy in the mind of consumer they you know we think when we're in our industry that like everybody's thinking about real estate all the time and I know that like actually people have a real estate thought once every five years statistically otherwise they're not even seeing the signs right they just drive byy them I don't know whatever I don't know so the mount when we ask a consumer to remember our sub brand Under a brand and then our name I'm like oh forget it that's just never it's just never going to work and also people forget like agents forget all the time like unfortunately for better or not your name is your brand your level of service that you represent that's your brand and that's the only thing you can hope that people are going to remember but like a sub brand that you do that's you know just I mean I know when I get in the car I get in an Uber and I go to the the airport and people be like what do you do and I'm like I'm in real estate I own a real estate company what company oh I've never seen that before and I'm like okay like if so for me to to know the that there are plenty people important still don't know who my company is to think the huus it takes for an individual agents without 135 top ranking agents that collaborate to think anyone's remembering their sub brand makes me laugh because I'm just like dude I it's hard it is hard out there but so yeah so we we we have very you know tight um brand rules that we that we follow and that helps because you know a top producer like someone like a Kristen Lincoln who's been in this business for 25 years anytime I do try to do something creative with our our brand she's like please just use the regular logo the regular font because when people see that no matter where they see it they think that's my brand they think that's mine keep it consistent and just keep reinforcing my individual brand out there as a part of the collective and then I think the other thing that you know what living room does and what we did that really set us apart and we still we still Embrace wholeheartedly was that at this point anybody can go to a myriad of sites and look at the houses like that's the product but what we know that Zillow will never know and Redfin will never know and realtor.com will never know is the people here in our community so tell the story of the problems that you solve specifically for the people right here in this time of our real estate market and what I have noticed is that as we have now told 16 years of these really unique stories of what it means to to make living room in Portland and how people pull it off is that it makes us incredibly referable because you know you go to a party you're talking to a friend and they're like yeah you know I've got to figure out a way to take care of my dad and I just don't know how that's going to affect both of our living situations and you know that is a problem that if I've talked about that in like how I've helped a father and son downside to share a duplex so he could provide care now I'm being highly referable because that person will hear that that issue and want to help that person solve it they you know if they care about them and then they're like oh you got to talk to my friend Janelle she did that for people that's really different than like I'm thinking about buying a house and it's like okay well we all know 40 Realtors like whatever you know like well go online you know that's where houses are but when you when you really talk about the individual challenges that you're solving it just makes you really referable and like whether interest rates go up or down people are in these sorts of life situations that they can you know oftentimes solve with real estate and that's where I want to be I want to be on the Forefront of like how do I help people overcome challenges and I'm going to get the business because you can go and like look at houses all day on any kind of site but nobody owns own that kind of information and the and the relationships in the way that like you know our firm and our agents do Janelle are you talking about having your people share those stories uh in their personal lives or is this part of a marketing campaign where you've found a way to to tell those stories to more people yeah so when I started the company um you know with no money and you know punk rock DIY kind of Spirit uh I knew at the time blogging was the big thing everybody's got to blog you know it it's the same way that social media is now everybody's got to be on social media and I was like oh my God I am so busy I you know in in the downturn I had sold I sold 42 homes and I'm you know as I've nursed a baby and changed a diaper at the same time and I was like I don't have time to be a expert blogger as well but I thought well okay we're g to start this little this Boutique agency and I bet though if each one of us just told a story every time we helped a seller or buyer we told a unique story well then we could round out communally a pretty decent blog ourselves and so we stuck with that over this you know 16 years where we've continued to tell those stories and of course the momentum that we have now I have like four or five unique content stories that are hitting our website every day so I mean the free SEO rankings just in alone I mean that's just a gift that's kept giving and that just came from a strategy of not having money to compete with the big guys and was like well what do we have well we know these folks that were helping and I also it went back to my own experience of you know I didn't know that home ownership was for me because whether anybody explicitly told me this or not but in our culture home ownership was something that happened after you got married and you had a baby so here I am this punk rock chick that's like I don't know marrying a baby orever on the table for me so it just didn't occur to me that homeownership could be because it's just not the way I saw things going and I think there's so many people in our culture that think the same thing they just think that's not for me that's for someone else and so I really had this mission when we started that like please show Regular People you know funky weird whatever unedited tell the story of how they did it because I want more you know young punks like me to see that and know that it's possible for them and so that's really you know at a on a the Deep level of why I'm really committed to the storytelling is because I think until you see someone from your own Community you just don't know it can be done and you know we've one of our uh values is diversity and and I am so moved every day by you know the agents that I have at living room the incredible diversity that we have there and the communities that they get into showing them that homeownership is for you too and like I can help you and I'm someone from your from your world and your community that can show you how and I I believe in in every bone and my body that a strong democracy a functioning democracy really is dependent on the widest distribution of home ownership well I want to get to the litigation that's rocking the industry but before we go there Sean I just want to ask you you know I know Janelle said she learned everything through trial and error and screwing things up but I don't know it sounds like she's got really good instincts for managing people for marketing for building a business what is it about about art school or should people be going to art school instead of getting mbas H how do you explain this Sean you know it's interesting Janelle when I ask you like how is it I I know you're everywhere you said consistency which I think is such an important message that people hear there's another part of it though that like I think you've done really well and this might be the art school thing which is like you have your degree in weaving I have mine in Ceramics so it's like the least financially viable degrees you could pick I think yeah amen you might beat me but I do think what to your question Lauren I think what Janelle has done especially in this idea of like customer segmentation and saying there's a group of people out there who are not being paid attention to you know a diverse interesting group of people who might be punk rockers they might be non-traditional they may not have families they may not be married they may be married to the same sex blah blah blah on and on and on so you've got this like idea of finding a niche that wasn't being well served and then the the other thing too it's like I was thinking of your consistency thing I'm like yeah well Hassen is consistent Remax is consistent there's a lot of consistent Brands out there but they don't feel so dominant to me and I think the other part of your magic equation is differentiation your agents are all these like handdrawn portraits of the agents which is is cool on a functional level in lots of interesting cool ways that I'd love but it's also it's just different it's just different than the rest of the market and so there's so much sameness out there that like you've done a good job of looking different and I think Art School teaches us that or at least it taught me that to like think in different ways I think you know and and being from the art well being from the the punk world like being okay to be a little different and that's something that is challenging and hard it's hard for my agent sometimes because like honestly do I love being a cartoon no like does it repel some Agents from one they're like I don't want to be a cartoon it's like I get it it's not about the cartoon it's that they work like they work though like people notice them and they work I think I'm a very practical person in that it's like if something works don't throw it out because it it makes you a little uncomfortable well then that probably means you feel a little vulnerable and what is that really about what what is that about and like I think being an artist you've got you get so used to being vulnerable you put yourself out there I mean being in sales seem like nothing to me like sure I'll sell real estate that's hell of a lot easier than selling myself all the time it's only something you know like yeah it's you know it's so interesting you use the word vulnerable but but it's true it's like the work you do to be a creative in in some ways is like really hard it's really really hard people often throw art under the bus like it's really a rigorous discipline if you take it seriously and as is performing you know music whatever and it's about self-discovery and so I think too that's where it's really powerful for for leadership yeah um because you you have to you have to look like you you're making with purpose and in managing resources managing my punkband on the road I mean like what better you know Financial lessons are there than that like you know very scarce resources and negotiation skills and you know it was like I got an MBA on the road with with those with those women that makes sense and you never took investment money did you in terms of your business you never all bootstrapped oh you should have heard the banks laughing at me in 2008 when I'm like I want to buy this building and start a real estate company they were like have you you turn on NPR like you have a radio yeah it's like a all right Janelle can you explain the litigation to us that has uh changed your world well I will say this is that um it's really interesting to me the breast and the spin I will say the daily New York Times absolutely broke my heart because I their their coverage of it was so one-sided and also came from a starting point as if a buyer's agent has no value which I was like well that's interesting that we saying that I completely disagree um but for us in the industry for for years for for years and years I have been hoping they would decouple commissions which they did I think that there were so many of us in real estate who wanted more transparency and also who represented buyers that wanted the ability to be able to negotiate our commission what I'm surprised by and which is completely just media cycle and spin is that when this ruling came out that many of us in the industry were excited about we didn't expect to be made into like the the the bad guy or the Boogeyman in the story of like oh you know agents have been you know making so much money and they wouldn't negotiate and it's like none of that was true let me see if I have this right the suggestion has been that there has been collusion on the part of buyers and sellers agents and that it removed the ability of uh of buyers of homes from being able to negotiate a sales fee uh with their agent it was all coupled together as you put it and this settlement will allow for negotiation that wasn't occurring before do I have that basically right yeah yeah so a buyer so when I sit down with a buyer now we can which I've been doing Honestly though this has been in practice and this is in practice already for our agents it is that we sit down and we fill out a buyer broker agreement and they are clear on the fee that we are going to be paid whether that came in the past came from the seller or if there was not a fee offered which was also something that that we saw happen all the time or I would help buyers buy unrepresented property or Trade property or buy something from their landlord or whatever they would sign a fee agreement which now all buyers will upfront sign a fee agreement because the number one problem that I really feel like this solves I'm very happy about is that there was all sorts of in our Market all sorts of marketing that was saying oh well it's free for you as a buyer to to get representation it's not free like you are paying for the cost of that home and so in that you are financing the cost of not only your commissions but you're financing the cost of the the sellers commissions they're going to be paying their agent to so it was never free um and this is great because it's a step towards transparency and you know I really really do welcome that now what is a huge I think loss is that we're talking about it's being brought up often that like this is going to help the affordability of homes this is not going blaming workers for affordability to me it kind of reeks of the same things we we see in any other industry it's like well if those coal miners would only work for cheaper then we'd have cheaper coal you know it's like why why in this country do we blame the workers on our affordability issues affordability is much much deeper issue than you know the experience and skill that two cooperating brokers take to get people to their end goal of home ownership or listing and marketing a home I mean this is affordability has a lot to do with government policies and the and you know restrictions of building and you know wages not keeping up with with the price of homes I mean it's such a complex issue and I'm absolutely devastated to see that we are once again deflecting you know important conversation we really need to have about afford what does the change mean for your firm uh will it have a financial impact on what you're doing I don't believe so no um you know I think that initially that anytime there's big change in Industries or perceived change you know we're it's going to slow things down a little bit in just our process and our work because we're going to have to be educating the consumer about you know what does this mean in practice and answering a lot of questions and maybe there be some doubt the market here is so tight I don't see it's going to be affecting whatsoever our our housing market at all I I'm really passionate about housing affordability partly because I think that there's such a trickle down effect of you know economic Vitality of a community I think about where are we going to have our employees at if they cannot afford to live in a community right exactly like basic thing if every business owner should be thinking about housing affordability for that reason alone if for greater you know kind of ethical Reasons I'm curious um if you were to kind of wave your magic wand and you could say changed a policy or two that you think could have an actual meaningful impact on housing affordability and and even volume and availability of housing what what would that be yeah I mean I definitely feel like the development fees in our city are absolutely astronomical they make no they make no sense and um and also how the encumbrances on trying to build I know a lot of really great Builders who've left the city they just don't want to work here anymore um and so I think that that has really um impacted affordability you know it's a it's a bigger thing but like the um mortgage interest deduction and this is where I vary from the national associate Realtors they Lobby and fight to keep that in place but to me I just think we as homeowners we don't need another win we are already winning let's redistribute that and make sure that's going more to um lowincome folks so I mean those are two big ones I'm sensing Janelle that uh you might not have been joking when you said you expect to run for governor someday oh you're you're that's my my husband when um he's always like I can't wait to live in that mansion and I'm like that sounds like a like a a really oh god um a scary reason to take that job but um I just I'm passionate about our city I've lived here I care deeply about it and I and I want great people to run and I want to keep doing what I'm doing because like you can have a lot of influence I think in in business and on the ground and and I feel like I'm in such a unique and just very privileged position to be interfacing with all the people that are falling in love with Portland coming here from other places my thanks to Shan busy and Janelle etel and to our sponsor the great game of business which helps businesses use an open book management system to build healthier your companies you can learn more at Great game.com thank you both wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren at21 hats.com that's l r n21 hats.com do a it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21 hats.com this episode was produced by Jess thubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]